Microsoft Surface Tablet: Destined For Failure? (MSFT)

Posted by · June 19, 2012 10:48 am

It hasn’t even been a day yet since Microsoft’s “major” media event in which it unveiled its Surface tablet, and already the new product buzz seems to have worn off among critics. Although it was positioned as a new rival to the Apple iPad, the newly unveiled Microsoft Surface already doesn’t seem to be equipped for the task—or at least the general tone among critics seems to say as much.

But before we let the skepticism flow, let’s take a look at what the new Microsoft tablet does have to offer its users.

A (Microsoft) Surface-Level Overview

Sporting a 10.6-inch screen, the Surface has the same weight and thickness as the iPad, but that’s about where the similarities end. On the back of the Surface is a built-in “kickstand,” which allows the tablet to be positioned upright for watching video or making a presentation. The “kickstand” is also handy for when users want to detach the Surface’s cover (called a “Touch Cover”), which also functions as a keyboard.

Hardly coming as a surprise, the new Microsoft tablet runs its own version of Windows 8—the official version of which isn’t set to debut until this fall. According to Microsoft CEO Steve Ballmer, it has long been a Microsoft trademark move to use new hardware as a means of underscoring the appeal of its new software, saying that the forthcoming Windows OS deserves “its own companion hardware innovations.”

The Microsoft Surface will come in two versions. The first—the consumer version—will be available with the user’s choice of 32GB or 64GB worth of storage and an ARM processor. Its release is set for the fall, alongside Windows 8. A few months later, the company is planning to release a profession version of the tablet as well. The storage options will be 64GB and 128GB and will boast an Intel processor. Needless to say, the pro version will be a bit more expensive, but Microsoft withheld pricing information on either tablet for the time being.

If consumers want to get one in the fall, though, the only place they’re going to be available is in Microsoft’s twenty retail locations and its online store. Which brings us to the first of many obstacles that lay in Microsoft’s path before the Surface even hits its shelves.

Beneath the (Microsoft) Surface

Limited Availability
Immediately, the first concern that comes to mind is the hindrance to sales that is like to arise as soon as the Surface goes on sale. As The New York Times observed, “One thing that will most likely limit sales of the tablet is Microsoft’s initial plan to sell it only in the company’s own retail stores, along with its Web store.” With only twenty current locations—and five more reportedly in the works—Microsoft seems to be banking on the rather unrealistic hope that potential users will either buy the tablet sight unseen or drive to their nearest Microsoft retail location.

Potential Partner Troubles
Although they called it a “game-changer” for Microsoft, PC Magazine was also a bit skeptical as to the Surface’s prospects. Calling it a “gamble,” Michael Miller made the following observation:

Not only is Microsoft entering the tablet market where it will compete head-on with Apple’s phenomenally successful iPad, but the company is also revamping its business model in a major way by going up against the hardware companies with which it has traditionally partnered.

In other words, not only is Microsoft moving in an Apple-like direction with secretive lead-ups to its product unveils, but the company is also borrowing from Apple by starting to make its own hardware. Although this isn’t guaranteed to undermine key partnerships upon which Microsoft has relied too see the current ubiquity of its software achieved, it does open the door to that kind of fallout.

However, Miller reminds us, the tablet market has remained relatively untapped by Microsoft and its partners. “It may be that Microsoft just wants to enter the parts of the market where its partners weren’t going to compete and will leave the standard notebook and Ultrabook market to its partners,” he suggests. Even so, a lot is riding on the Windows 8 brand with the release of the Surface. If the tablet fails, the ripple effect is sure to be felt across all platforms that support the Microsoft OS, putting the company is quite a predicament with its partners. Then again, the opposite is likely to happen if the Surface sees widespread user adoption.

As an early indicator of the Surface’s potential effect on Microsoft partnerships, The Wall Street Journal saw shares of Dell and HP drop by approximately 2 percent and half a percent respectively after the announcement.

Not Quite An iPad Rival
Lastly, the Microsoft Surface—despite looking “quite good,” as PC Mag’s Michael Miller put it—doesn’t appear to have what it takes to compete directly with the Apple tablet. Although its tablet is impressive by most measures, Forbes writer Nigam Arora argues that the Microsoft tablet is “no iPad killer for several reasons.”

First, Microsoft and Apple are still on completely different brand wavelengths. While Apple, is making a “clean break” from the PC era, Arora believes that Microsoft is trying to combine the PC and mobile eras.

Second, the Surface is a tablet-laptop hybrid—something that Apple has explicitly disavowed in its development of the iPad. Naturally then, the two tablets are typically going to appeal to two very different groups.

Third, “Microsoft lacks Apple’s pizazz [sic],” says Arora. Speaking not only as an Apple fan but as one who has been involved in company branding, I am inclined to agree that Microsoft lack a certain degree of hipness. “iPad is fun. Surface is more utilitarian.”

The final reason the Surface likely won’t be able to compete head-on with the iPad, Arora says, is its ecosystem. “In my judgment, it will take Microsoft one to two years to catch up with Apple’s present day ecosystem,” he says. By this point, of course, Apple will also be beyond its current position, and so goes the perpetual cat-and-mouse game that Arora believes the competitive relationship of Microsoft and Apple to be.

Which begs the question: If the two tablets from two generally successfully aren’t true competitors by such measures, who says they have to be?

What do you think? Share your thoughts in the comments below.

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